Honda, which for many years has been driving down the hybrid route, may be having second thoughts about demand for battery powered electric cars.

In July the company announced plans to launch a plug-in hybrid and pure electric car in 2012, but stopped short of laying out a roadmap of how they would contribute to its business.

However chief executive Takanobu Ito told reporters in Tokyo that the market for electric vehicles looked to be taking off.

He added: “”We can’t keep shooting down their potential, and we can’t say there’s no business case for it.”

Under former CEO Takeo Fuku, Honda remained a strong proponent of hydrogen fuel cell cars as the best zero emission alternative to the combustion engine because they have a similar driving range of 500-600 km (310-375 miles), considerably better than battery EVs.

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Ito said: “The thing is, not everybody needs to drive 500 km a day.” However he would not predict how big the EV market could be, and how soon it would take off.

He did say that pure electric cars made more sense than plug-in hybrids which have the “handicap of having an engine, a motor and a stack of batteries. Why wouldn’t you just drive an EV?”

Ito is due to unveil a new electric car concept at the Los Angeles motor show on 17 November. California has some of the world’s strictest environmental regulations, and Honda has said it would sell battery EVs there only to meet the state’s zero emission requirements.